Ukraine. Low supply of wheat on the domestic market is holding back exports

The domestic Ukrainian wheat market is beginning to experience a deficit, which is traditionally observed in October-November. This was reported by the analytical department of the agricultural cooperative PUSK, established within the VAR. “As of October 6, wheat exports from Ukraine amounted to 115 thousand tons. The dynamics remain stable for now, but traders are already starting to experience certain difficulties, primarily related to the low supply of grain on the domestic market. October-November are traditionally weak months in terms of supply. During this period, the price usually increases, so producers are not in a hurry to sell,” analysts note.

Over the past week, wheat prices have increased by $1–3 per ton. Food wheat of class 2-3 is traded in the range of $220–225 per ton, feed wheat — $206–211 per ton, depending on the protein content. Prices are also affected by the situation on the global grain market.

“On the world market, we are gradually moving from a large supply to a certain balance and even a reduction. In addition, an additional driver for price growth is the problems with logistics in Russia – shipments are slowing down due to FSB inspections. If last season Russia exported 5-5.5 million tons of wheat in October-November, now it will be underloaded by about 1.5 million tons. The market is starting to feel this,” the PUSK explains.

Thus, experts predict a gradual strengthening of wheat prices in the coming months – against the backdrop of low domestic supply, a decrease in world stocks and logistical restrictions in competitive countries.

“By the end of October, food wheat may return to the level of $230 per ton. The seasonal model shows that further growth is expected in January-February – up to $250-260 per ton CPT port for third-class wheat. That is, the potential for further growth is about $30 per ton,” the experts add.

Tags: Ukraine, export, prices, wheat